The furniture industry has not yet explored the bottom of the winter

Looking back on 2008, the Chinese furniture industry seems to have only felt a chill. Afterwards, a series of macro-support policies have allowed the furniture industry to continue to move forward. Apart from the obstruction of the export market, the domestic market does not seem to have much impact. However, this situation began to appear “quick turn” in the second half of last year, and the export market has not seen a significant improvement. At the same time, with the shrinking of the domestic mainstream market, China’s furniture industry has begun to “excess”, coupled with various raw material costs. The increase in labor costs, circulation costs, and the increase in terminal operating costs... China's furniture industry has once again staged the 2008 "nightmare", but this time it has become more real.

In order to survive, many furniture companies began to think about the way out. While Taiwan-funded furniture enterprises are constantly moving out, many local furniture factories are actively exploring the road of transformation, because the real "cold winter" is still behind.

Enterprises are thinking about ways to survive

"This year's challenge is very big, we are fighting for survival." Shenzhen Guohao Furniture Development Co., Ltd., head of Guo Guozhong said that from 2009 to 2011, Renhao Furniture increased by 30%-40% annually. "But the growth plan set this year has not been achieved and can only be flat."

The Banmu Furniture Factory in Longgang, Shenzhen, saw a bad environment this year and immediately reduced spending on advertising. "Now we must look at the control of the enterprise, and the loss of enterprises with fast contraction will be less." You Guozhong said.

He believes that the government regulates real estate, fewer people buy houses, and furniture sales naturally decrease. “Moreover, the Chinese furniture industry is expected to have a surplus of 30%-40%, and the current industry operating rate is only 60%-70%.”

Labor costs have risen by about 20% this year, and the average monthly wage of ordinary workers is 2,700-2,800 yuan. Therefore, Renhao Furniture is promoting large-scale and mechanized production.

You Guozhong said: "We must do a good job in brand and service to help dealers push the goods. This year's environment is not good, and some home hypermarkets have reduced the rent for 1-3 months for dealers. We also actively explored some projects. client."

It’s already good. Recently, the Shunde Small and Medium Export Furniture Enterprise's production and operation status report released by the Shunde Entry-Exit Inspection and Quarantine Bureau shows that the situation is more serious than in 2008. There are about 5,000 furniture enterprises in Shunde, of which more than 400 are qualified for export, basically small and medium-sized enterprises. This year, many companies' export orders fell by more than 40%, and the gross profit margin was already below 10%. If the cost is deducted, the net profit may be only 3% to 5%.

There are also media reports that due to the decline in sales performance by more than 30%, several "leaders" furniture companies in Zhengzhou have already seen one-third of workers not working.

The well-known furniture brand in Hong Kong, which is listed in Hong Kong, announced recently that the profit for the first half of this year is expected to fall by more than 90% year-on-year, mainly because of the decline in sales.

As one of the major suppliers of domestic furniture coatings, Chen Bing, chairman of Shenzhen Zhanchen Coatings Co., Ltd. observed: More than 2,000 of its furniture customers, 95% of customers fell in revenue this year, and orders fell 10%-30%.

Chen Bing said: "The export has shrunk. First, the factory moved outside. Many Taiwan-funded and Hong Kong-owned furniture factories moved from Dongguan to Southeast Asian countries such as Vietnam. Second, orders were transferred. Due to the increase in labor costs in China and the appreciation of the renminbi, many foreign countries Merchants transfer orders to other countries and regions; third, some foreign orders are too low, and the return period is too long, and domestic furniture companies are reluctant to take orders."

Furniture transformation is difficult

Perhaps the boat is a good turn, and Sishang Furniture Co., Ltd., located in Nantou Town, Zhongshan City, has grown against the trend this year. Chen Min, the general manager of the company, told this newspaper that Sishang has begun to seek transformation since four years ago. "In 2009 and 2010, we earned income, but last year and this year we achieved growth."

The staff of Sishang Furniture has decreased from 230 people four years ago to 150 people this year. Chen Min said frankly that this year, the artificial increase of 20%, the average worker's monthly salary of 3,000 yuan. "5-6 years ago, we were ready to build a factory in Jiangmen, but fortunately did not build."

Chen Min promoted the transformation of the factory and made three "actions": First, focus, the product changed from office furniture to office chair; second, upgraded industrial design ability, and won the award in the design contest of the "Province Cup" in Guangdong Province last year. The third is marketing innovation. Originally cooperated with American importers, and now directly cooperates with American furniture brands and has their own product brands.

Although this year's export and domestic sales revenues have increased by 40% year-on-year, Chen Min still said, "We have encountered very big challenges."

“Compared to last year, the RMB exchange rate increased by about 10%, and the impact on sales reached 30%. Vietnam and Bangladesh are not very mature, but Thailand’s competitiveness is not weak, and its labor cost is lower than that of China.” Chen Min said, “ Next, our opponents are Korean companies, their supply chain is more mature, efficient, and the national brand is stronger."

“Europe and the United States are similar to our costs. Some of our plastic parts come from European companies like BASF. European workers earn 1,000-2000 euros a month, but the efficiency is high; the US monopolizes resources and the energy costs are low.” Chen Min said, In Taiwan, mainland workers are 3,000 yuan/month, and Taiwan is 5,000 yuan/month. However, Taiwan-funded factories have good quality and high efficiency and can seize the mid-range market.

"So, some people in the low-end market are robbing, and the mid-range market is also facing competition from local companies in Europe and the United States. Because our products are shipped, freight rates are also increasing." Chen Min feels that the path of transformation is still very long.

What makes Chen sensitive to the accident is that in the first half of this year, there was an Italian customer who asked Sishang to help design and produce it by themselves. "China's design is promising in the future." He said that in the future, on the basis of improving industrial design capabilities, on the one hand, the domestic market will be done well, and at the same time, global resources should be utilized.

At present, there are 40%-50% of component outsourcing production, and in the future this ratio will increase to 60%-70%. "We will focus on the core issues." Chen Min said.

Big companies are also transforming. The Jianwei Group, located in Jiangmen, mainly exports furniture to the United States. In May of this year, Jianwei proposed at the supplier conference, focusing on exporting to domestic sales, supporting dealers to expand, hard work and lower costs.

The furniture industry has not yet reached the bottom

In the eyes of Tao Yongjun, the person in charge of the sales of Pearl River Delta in the exhibition, the Guangdong furniture manufacturing industry has undergone some obvious changes this year: due to the difficulty of recruiting workers, the “90s” is not as hard as the predecessors, so despite the bad economy, many furniture factories have been launched this year. Automatic spraying line and automatic dryer to reduce manpower.

“Another change is that in 2008, the proportion of export and domestic sales companies was about 5:5. Now 70% of enterprises are only exporting a little and shifting their energy to domestic sales, because most of the profits from export are earned by traders such as home-line in the US. went."

"And, the division of labor has become more specialized. In the past, it was divided into two categories, office and household furniture. Now there are children's furniture , as well as factories specializing in cabinets and other components." Tao Yongjun said.

He believes that "the future furniture factory will be divided, one type for production, mechanized large production; the other, increased labor, focus on art carving, industrial design. It is expected that the big factory will merge with the small factory, the small factory independent is difficult to receive orders. As environmental protection requirements increase, the plates, coatings, etc. of the factory must comply with environmental protection requirements, and some small and medium-sized furniture factories will be eliminated due to increased costs."

Tao Yongjun is optimistic that the rigid demand for housing is still in place, and the furniture industry will warm up in the second half of this year and the first half of next year.

However, Liu Zhengqiu, marketing director of Jianwei Group, believes that the real winter has not yet arrived. China’s GDP growth rate is still nearly 8% this year, and will gradually drop to 5% within ten years. "The low-cost advantage of China's manufacturing industry is still ten years. After ten years, enterprises will differentiate, or they will cultivate world brands and produce unique products. They will either produce on a large scale and only OEM. Or they will have strong design capabilities. Several people also Can support themselves."

"Transformation requires vision and resources." Liu Zhengqiu said that only 30% of furniture brand enterprises have the ability to transform, 30% of enterprises have no transformation ability, continue to earn processing money, and 40% of enterprises survive. "The real winter is still behind."

Deng Guangsen, secretary general of the Zhongshan Furniture Chamber of Commerce, holds the same view. He said that instead of developing a new product or transforming it, it is not simply to transfer the factory to another place. It is transformation. The success of transformation must be smart, set a good position, and invest in matching resources. This is no less than a second venture.

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